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09CV2094
UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF CALIFORNIA
IN RE: EASYSAVER REWARDSLITIGATIONCASE NO. 09-CV-2094-MMA (BLM)
ORDER:GRANTING IN PART ANDDENYING IN PART DEFENDANTPROVIDE COMMERCE’SMOTION TO DISMISS
[Doc. No. 34]
DENYING DEFENDANT ENCOREMARKETING INTERNATIONAL’SMOTION TO DISMISS
[Doc. No. 38]
GRANTING PLAINTIFFS’MOTION TO STRIKE
[Doc. No. 48]
Before the Court are separate motions to dismiss by the two Defendants in this class actionconsumer rights case. The Court submitted the motions on the written briefs. Local Civ. R.7.1(d)(1). For the reasons stated below, the Court
DENIES
the motion to dismiss by DefendantEMI, and
GRANTS IN PART
and
DENIES IN PART
the motion by Defendant Provide.
I.F
ACTUAL
A
LLEGATIONS IN
C
ONSOLIDATED
C
OMPLAINT
The Consolidated Complaint alleges that Defendant Provide-Commerce, Inc. (hereinafter“Provide” or “Provide-Commerce”) operates several internet businesses, includingProFlowers.com. Customers order fresh flowers, bouquets, and plants on the ProFlowers’ website
Case 3:09-cv-02094-MMA-BLM Document 61 Filed 08/13/10 Page 1 of 33
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All references to credit and debit accounts include payments through a PayPal account.PayPal provides an intermediary account for internet purchases. PayPal charges the seller afee for its service. The customers fund their PayPal accounts through electronic transfers fromtheir own financial institution (
e.g.
, checking account, debit card, or credit card). PayPal keepsthe customers’ financial information confidential, thereby, providing a measure of security foronline purchases. PayPal, https://www.paypal.com (last visited June 16, 2010).
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09CV2094
and pay for the purchase with a credit or debit card.
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The four named Plaintiffs are Josue Romero,Deanna Hunt, Kimberly Kenyon, and Gina Bailey. Each consumer purchased flowers onProvide’s website between February and September 2009 with a credit or debit card.Plaintiffs allege that Provide, as a part of its “revenue generating efforts . . . routinely andfraudulently transmits its consumers’ credit card, debit card and/or Paypal information (“PrivatePayment Information”) to its third party marketing partners.” Compl. ¶ 1. Plaintiffs nameDefendant Regent Group, Inc. doing business as Encore Marketing International (hereinafter“EMI” or “Encore”) as Provide’s marketing partner. Plaintiffs allege EMI “fraudulently charge[s]the cards or accounts without permission under the guise that” Provide’s customers have“supposedly joined a savings program known as EASYSAVER Rewards, which Encore manageson Provide-Commerce’s behalf.”
Id.
“[T]he EASYSAVER Rewards program does not providethe promised savings, benefits products or services and is nothing more than a sham.”
Id.
Plaintiffs allege that Provide leads customers to believe they will receive a complimentary$15.00 gift code to use on their next flower order as a thank you gift. After Plaintiffs completedthe purchase of flowers on Provide’s website by providing their personal and paymentinformation, “a window popped up that thanked Plaintiffs and Class Members for their order andoffered a gift code for $15.00 off their next purchase at ProFlowers. The window also contained alink for Plaintiffs and Class Members to click on to claim the gift code.”
Id.
¶ 19. Plaintiffscontend the pop-up window is part of an intentionally misleading and deceptive scheme, jointlyorchestrated by Provide and EMI.“When customers try to obtain their ‘gifts,’ they are directed to a webpage operated byEncore.”
Id.
¶ 2. Plaintiffs quote the webpage, in all capital letters, as stating: “CLAIM YOURGIFT CODE BELOW! JUST ENTER YOUR E-MAIL ADDRESS AND ZIP CODE AS YOURELECTRONIC SIGNATURE AND CLICK THE GREEN ACCEPTANCE BUTTON BELOW
Case 3:09-cv-02094-MMA-BLM Document 61 Filed 08/13/10 Page 2 of 33
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The proposed nationwide class includes those who purchased merchandise from anyof Provides’s webpages from August 19, 2005 and had EasySaver Rewards charges on theircredit or debit cards.
Id.
¶ 42. Subclass A are those consumers who did not provide their emailaddress or click the acceptance button; subclass B includes those who did provide their emailaddress and clicked the acceptance button; and subclass C is all class members who had theirdebit card charged.
Id.
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09CV2094
TO ACTIVATE YOUR EASYSAVER REWARDS MEMBERSHIP AS DESCRIBED IN THEOFFER DETAILS ON THIS PAGE.”
Id.
Each named Plaintiff had a slightly different experience.
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Plaintiffs Romero and Kenyonallege that they closed the pop-up window by clicking the “X” on the top right corner withoutentering their e-mail address and without clicking the acceptance button.
Id.
¶ 20 & 23. Plaintiff Bailey does not remember the pop-up window, but alleges that “it is her general practice to alwaysclose pop-ups.”
Id.
¶ 25. By contrast, Plaintiff Hunt responded to the pop-up window by enteringher e-mail address and clicking the acceptance button. Hunt, however, “did not even realize thatshe had been redirected away from ProFlowers’ website to Encore’s website due to the deceptivenature of EASYSAVER Rewards marketing scheme.”
Id.
¶¶ 28, 31. Rather, she believed theinformation was necessary to complete her ProFlowers transaction. All Plaintiffs state they didnot want to join EASYSAVER Rewards, yet they were immediately charged an activation fee, andthirty days later, they were charged a monthly membership fee.
Id.
¶¶ 20-30. These complaintsare mirrored by numerous unidentified consumers who posted comments on the internet.
Id.
¶ 36.All Plaintiffs state they never received any correspondence from the EasySaver program letalone any benefits, savings, or rewards.
Id.
¶¶ 21, 24, 26, 29.Efforts to have the charges reversed were unsuccessful. For example, when Plaintiff Romero contacted ProFlowers, the representative “indicated she had been receiving numerouscalls about unauthorized charges by Encore via the EASYSAVER Rewards Program.”
Id.
¶ 22.Plaintiff Bailey closed her bank account to stop the unauthorized charges.
Id.
¶ 27.Plaintiffs allege the marketing practice is deceptive because it “unwittingly” enrollscustomers. The EasySaver Rewards offer does not refer to charges for membership, does notdisclose that Provide will share the customer’s financial information with EMI, and does notrequire the re-entry of that financial information.
Id.
¶¶ 31-32.
Case 3:09-cv-02094-MMA-BLM Document 61 Filed 08/13/10 Page 3 of 33
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